The pharmacy chain Rite Aid is facing a new issue in its Chapter 11 Bankruptcy proceedings as the U.S. Department of Justice (DOJ) has announced intentions to defy the embattled company’s date to bar new claims in the proceedings. The chain, which declared bankruptcy amid a slew of legal claims of unlawful opioid prescription fulfillment, claims that the DOJ’s request could irrevocably cripple the company and prevent it from restructuring successfully.

According to Law360, the DOJ argued before the U.S. Bankruptcy Court for The District of New Jersey that it should receive 180 days to file claims against the estate of Rite Aid. The DOJ’s claim puts it at odds with other debtors as well as Rite Aid itself who claim that the six months the Department is demanding is in violation of the bar date that Judge Michael B. Kaplan had already approved and jeopardizes the state of the entire bankruptcy. Judge Kaplan has already given Rite Aid approval on Nov. 16 to set a much more conservative deadline for bankruptcy claims of Jan 12, 2024. 

Rite Aid ended up in this position after facing major allegations that it unlawfully fulfilled opioid prescriptions and exacerbated the state of the opioid crisis. Crushed under the legal weight of these claims as well as increased competition from online pharmacies such as Amazon, Rite Aid folded and declared bankruptcy. In order to facilitate the bankruptcy, Bank of America has provided Rite Aid with a debtor-in-possession financing package of $3.45 billion. This loan provided a significant amount of capital to continue operating the business, but only provided $200 million in new money. Additionally, the interest and fees for the loan are expected to exceed $200 million very soon. This means that if proceedings are not concluded swiftly, Rite Aid may find itself in more financial trouble.

Despite these contentions, Gregory Werkheimer, representing the DOJ, told the court that "I do need to be very clear that the United States will be opposed to any abbreviation of the 180-day period. The United States will vigorously defend its ability to take action within that period." This has put the DOJ in opposition to the official committee of tort plaintiffs who see the government as a potential spoiler for the entire process.

Whether or not the DOJ prevails in its demands, the results of this bankruptcy will dictate if and how any remaining plaintiffs will receive compensation from the bankrupt estate of Rite Aid.

If you or a loved one have been harmed by a defective drug, medical device, or consumer product, you may be entitled to financial compensation. Contact Medtruth today for a free, no-obligation case review and begin your journey to justice.